Companies Reporting: Greggs and Next

Our regular look at the FTSE 350 and a selection of other companies reporting from 2-6 January 2023.

• Will Greggs win the battle against rising costs?
• Next will shine a light on how UK retail has fared over Christmas

Greggs, Q4 Trading Statement, Thursday 5 January

Matt Britzman, Equity Analyst, Hargreaves Lansdown: “Greggs LON:GRG will share details of its fourth quarter and full-year trading performance. The consensus amongst analysts is for revenue to come in around £1.45bn for the full year, an 18% increase. We’re unlikely to get any profit details, but we expect most of that revenue growth to be eaten up by higher costs. Costs have been under pressure all year by the impact of inflation, running at around 9% on a like-for-like basis. We’ll be watching for any commentary on how this dynamic is expected to play out in 2023.

Greggs is pushing on with plans to bolster its estate, we’re expecting to hear news of more openings in the fourth quarter. For the full year, the group’s been targeting 150 net openings, of which around 40% are expected to be with franchise partners. That’s all part of Greggs’ plan to increase the number of franchise stores, something we’re supportive of as it means day to day running costs can be passed on to franchisees.”

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• UK Stock Market News: Greggs, Beazley, Oxford Nanopore

Next, Q4 Trading Statement, Thursday 5 January

Sophie Lund-Yates, Equity Analyst, Hargreaves Lansdown: “Next LON:NXT is the first retailer out the gates with a post-Christmas trading update. That means it will be watched closely for an inkling of how the festive season has been for the wider sector. Last we heard, Next expects sales to be down 2% for the full financial year amid a backdrop of changing consumer spending habits. The past few weeks will be a crucial pillar of that, and we’re keen to see that trading hasn’t been worse than expected. Recent UK figures show that retail parks have been faring better than high streets, which could hold Next in good stead.

We’re also interested to see how the integration of recently acquired Joules is going. The deal includes a high number of Joules stores and we wonder how many of these could have been earmarked for closure.

The other major question mark will be margins. As costs increase, margins are coming under pressure. This isn’t an isolated story for UK businesses in the current environment, but we’d like some reassurance that things aren’t deteriorating any further.”

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report